The Future of Insurance Regulation in Ghana

From digital databases to new compulsory insurance types, Ghana’s insurance sector is undergoing its most significant regulatory transformation in a generation. This ASJ article explains the changes, what they mean for insurers and policyholders, and where the industry is headed.

Introduction

For years, Ghana’s insurance industry has been described as having “poorly low” penetration rates, with fewer than one percent of Ghanaians holding any form of insurance . The regulator, the National Insurance Commission (NIC), has been criticised for weak leadership and a compliance-based approach that failed to keep pace with a changing world .

But that is changing. The NIC is implementing a comprehensive strategy to reset the sector . New laws have expanded the types of insurance that are compulsory. Digital databases are making it harder to sell fake policies. A regulatory sandbox is encouraging innovation. And the Ghana Card is becoming the key to accessing insurance services.

This is the future of insurance regulation in Ghana. It is about building trust, embracing technology, and finally growing the industry beyond its reliance on motor insurance .

The Legal Foundation: Insurance Act, 2021 (Act 1061)

The Insurance Act, 2021 (Act 1061) replaced the old Insurance Act, 2006 (Act 724) . It is the legal foundation for the regulatory changes now unfolding.

The Act introduced several key provisions aimed at “revolutionizing the insurance market” :

Expanded Compulsory Insurance

Previously, only motor insurance and fire insurance for commercial buildings were compulsory. Act 1061 added two more types of compulsory insurance :

• Public Liability Insurance – This covers businesses against liability for bodily injury or property damage caused to third parties as a result of their operations. It applies to commercial buildings like offices, banks, shopping malls, factories, and hospitals .

• Professional Indemnity Insurance – This is required for professionals such as accountants, medical doctors, lawyers, insurance practitioners, and financial analysts . It protects them against liability for loss or damage arising from negligent acts, errors, or breaches of duty .

The Regulatory Sandbox

Act 1061 includes provisions that allow the NIC to grant “innovative insurance licenses” to companies using new technologies or approaches . This has enabled the creation of the regulatory sandbox—a controlled environment where insurtechs can test new products without disrupting the wider market .

Agricultural Insurance Fund

The Act established an Agricultural Insurance Fund to provide financial resources for subsidising agricultural insurance premiums, training agricultural extension officers, and investing in technology to educate farmers .

Insurance Education Fund

The Act also created an Insurance Education Fund to support the Ghana Insurance College and educate the public on insurance matters .

The NIC’s Three-Pillar Strategy

Under Commissioner Dr Abiba Zakariah, who took over leadership in 2025, the NIC is implementing a three-pronged strategy “to reset Ghana’s insurance sector” .

Pillar 1: Insurance Market Sanitisation

The first priority is building trust by eliminating unethical practices. The NIC is :

• Collaborating with industry players to identify unethical practices and propose practical solutions

• Developing standardised rates and terms for various insurance product lines

• Implementing a Risk-Based Supervision (RBS) framework to detect and respond to market misconduct promptly

• Launching a Customer Satisfaction Index to improve service delivery

The regulator has acknowledged that a key challenge is the “increasing compromises by some industry players on ethical practices,” including premium undercutting . The goal is to ensure that “ethical integrity is non-negotiable” .

Pillar 2: Digital Transformation

The NIC is rolling out digital databases and systems to modernise the industry . These include:

The Motor Insurance Database (MID) – Launched in 2020, the MID has been described as a “groundbreaking success in revolutionising motor insurance business in the country” . It allows the police and the public to verify insurance instantly.

The Marine and Aviation Insurance Database – This is nearing completion and will support underwriting for cargo and aviation insurance .

The One-Time Attendance Code (OTAC) – This digital system is being introduced to verify patient attendance and reduce fraud in health insurance claims. Anecdotal evidence suggests at least 15% of claims currently paid may be ineligible .

The Regulatory Sandbox – Five insurtechs have been admitted to the first cohort, including Figtech Limited, Moovon Insure, Holland Insurance and ETAP, Trade Guarantee Limited (TGL), and Red Pear Limited . These companies are testing innovative insurance solutions in a controlled environment.

Pillar 3: Expanded Penetration Measurement

The NIC is working with the Ministry of Finance to revamp how insurance penetration is calculated. The current methodology only accounts for life and non-life insurance. The new framework will incorporate pension funds and national health insurance .

This is significant because it will provide “a more comprehensive view of the country’s insurance sector” . The Director of the Financial Sector Division at the Ministry of Finance noted that “pensions is insurance” and that other jurisdictions include these figures in their penetration rates .

The Ghana Card Mandate

Beginning January 1, 2026, the Ghana Card is compulsory for all motor and general insurance transactions .

The NIC has stated that “individuals will not be allowed to purchase or renew insurance policies without presenting a valid national identity card” . Corporate clients must also provide their Tax Identification Number .

The Commission says the move will:

• Tighten claims administration

• Reinforce compliance with KYC and Anti-Money Laundering frameworks

• Reduce fraudulent claims

• Improve transparency

• Align Ghana with global best practices 

This places the insurance industry in step with broader financial sector reforms, particularly those implemented by the Bank of Ghana .

The Shift to Risk-Based Supervision

The NIC is moving from a “compliance-based” approach to “Risk-Based Supervision” (RBS) . This is a significant shift.

Under a compliance-based approach, regulators focus on whether insurers have broken specific rules. Under RBS, regulators proactively identify and assess various risks that insurers face, as well as their ability to manage those risks .

What RBS Means

The NIC’s RBS framework allows it to :

• Detect and respond to market misconduct promptly

• Allocate supervisory resources to insurers with the greatest risk and impact

• Set capital requirements that are commensurate with an insurer’s risk

The Challenges

Implementing RBS is not easy. It requires :

• Building capacity and training staff to make more subjective risk assessments

• Continuous updating of risk assessments through on-site inspections and off-site monitoring

• Complex data analysis using specialised software

• Insurers to put adequate risk management systems in place

Most insurers in Ghana currently lack actuaries and adequate risk management functions . But this is exactly what the regulator is pushing them to develop.

The Need for Strong Leadership

The NIC itself has gone through a period of leadership uncertainty. The Commission was “leaderless for over a year” after Justice Yaw Ofori left . The current Commissioner, Dr Abiba Zakariah, took over in 2025 and has begun implementing the three-pillar strategy .

Industry observers have noted that the next Commissioner will face significant challenges :

• The legacy of the Domestic Debt Exchange – This left many insurance companies with locked-up funds.

• Climate change – Insurers need to develop products for agricultural sustainability and climate-related risks.

• Cyber risk – The growing threat of cyberattacks requires new types of coverage.

• Artificial intelligence – Technology is changing how insurance is delivered.

• Low penetration – The industry must grow beyond its reliance on motor insurance .

The new leadership will need to “think outside the box and apply the tools of regulation to grow the industry” .

What This Means for Ordinary Ghanaians

These regulatory changes are not just for insurance companies. They affect everyone.

More Protection – The new compulsory insurances—Public Liability and Professional Indemnity—mean that businesses and professionals must now carry coverage that protects the public. If a doctor makes a mistake, or if a shopping mall causes injury, there is insurance to compensate victims .

Less Fraud – The Motor Insurance Database and the Ghana Card mandate make it harder to sell fake policies. When you buy motor insurance, you can verify it immediately using the *920*57# USSD code.

Innovation – The regulatory sandbox is allowing new products to be developed, including microinsurance for low-income Ghanaians and digital-first policies that can be bought on a mobile phone .

Better Service – The NIC’s Customer Satisfaction Index and focus on ethical practices should improve how insurers treat their customers .

Accurate Picture – The revamped penetration calculation will show a more accurate picture of how many Ghanaians actually have some form of insurance, including pensions and health insurance .

ASJ Conclusion

The future of insurance regulation in Ghana is one of transformation. The regulator is moving from a passive, compliance-based approach to an active, risk-based approach. It is embracing technology through digital databases and a regulatory sandbox. It is expanding compulsory insurance to protect the public. And it is building trust by tackling unethical practices.

For insurers, this means adapting to new regulations, investing in risk management, and innovating to reach underserved markets. For ordinary Ghanaians, it means better protection, less fraud, and more accessible products.

As the NIC has stated, building trust is the critical step in driving sustainable growth in Ghana’s insurance industry . The changes now underway are designed to achieve exactly that.

Quick Facts

Frequently Asked Questions

1. What is the Insurance Act, 2021 (Act 1061)?
It is the legal foundation for insurance regulation in Ghana. It replaced the old Insurance Act, 2006 and introduced new compulsory insurances, a regulatory sandbox, and other reforms .

2. What new types of insurance are now compulsory?
Public Liability Insurance (for commercial buildings like shops and offices) and Professional Indemnity Insurance (for professionals like doctors and lawyers) are now compulsory .

3. What is the regulatory sandbox?
It is a controlled environment where insurtechs can test new insurance products and technologies without disrupting the wider market. Five companies have been admitted to the first cohort .

4. What is the Ghana Card mandate for insurance?
From January 1, 2026, the Ghana Card is compulsory for all motor and general insurance transactions. Corporate clients must provide their Tax Identification Number .

5. What is the Motor Insurance Database (MID)?
It is a national digital system that records all valid motor insurance policies. It allows the police and the public to verify insurance instantly using the *920*57# USSD code .

6. What is Risk-Based Supervision?
It is a regulatory approach where the NIC proactively identifies and assesses risks that insurers face, rather than just checking whether they have broken specific rules. It allows the regulator to focus resources on insurers with the greatest risk .

7. Who is the current Commissioner of Insurance?
Dr Abiba Zakariah was appointed in 2025 and has begun implementing a three-pillar strategy focused on market sanitisation, digital transformation, and expanded penetration measurement .

8. What is the three-pillar strategy?
The NIC is focusing on Insurance Market Sanitisation (building trust, eliminating unethical practices), Digital Transformation (databases, sandbox), and Revamped Penetration Measurement (including pensions and health insurance) .

9. Why is insurance penetration being recalculated?
The current methodology only accounts for life and non-life insurance. The new framework will also include pension funds and national health insurance, providing a more comprehensive view .

10. How will these changes affect ordinary Ghanaians?
They will benefit from better protection through new compulsory insurances, less fraud through digital verification, more innovative products, and improved service standards .

11. What is the Insurance Education Fund?
It is a fund established under Act 1061 to support the Ghana Insurance College for training insurance professionals and educating the public on insurance matters .

12. What is the Agricultural Insurance Fund?
It is a fund under Act 1061 to subsidise agricultural insurance premiums, train agricultural extension officers, and invest in technology to educate farmers

Source: Accra Street Journal 

Last Updated on August 18, 2026 by Samuel Kwame Boadu

Samuel Kwame Boadu

Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.

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